By Colin Packham and Charlotte Greenfield
SYDNEY/WELLINGTON, June 2 (Reuters) - Australian shares fell to more than two-week lows on Thursday as market sentiment remained under pressure from weak Chinese economic data and expectations that Australia may delay widely expected interest rate cuts.
The S&P/ASX 200 index .AXJO fell 0.9 percent, or 48.07 points to 5,275.1 by 0254 GMT, the lowest since May 9. The benchmark fell 1 percent on Wednesday.
"There are a range of factors weighing today. The key one I think is the disappointment over China's PMI data, concerns are increasingly turning to China," said Angus Nicholson, market analyst, IG Markets.
China's manufacturing activity showed signs of steadying in May but remained weak amid soft demand at home and abroad, suggesting the world's second-largest economy is still struggling to regain traction. fact that (Australian) GDP figures were much stronger than many had expected has cast some doubt on where the market was positioned for interest rate cuts."
Australia's economic growth boomed past expectations in the first quarter with the annual pace speeding to its fastest in over three years, an upbeat result that all but assures the central bank will be on hold at its policy meeting next week. strong Australian economic data and subsequent interest rate uncertainty weighed on the country's financial stocks, with the sector falling 0.35 percent.
Shares in Westpac Banking Corp WBC.AX and Australia and New Zealand Banking Group ANZ.AX all fell more than 1 percent.
National Australia Bank Ltd NAB.AX fell more than 1.5 percent as shares hit a near one-month low.
Australia's largest miners BHP Billiton (LON:BLT) Ltd BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX both fell more than 1 percent as the price of iron ore fell.
New Zealand's benchmark S&P/NZX 50 index .NZ50 looked set for a second day of losses as it retracted from six consecutive sessions of gains which saw the market at record levels.
The index was down 0.10 percent or 6.68 points at 7,015.47.
Restaurant Brand RBD.NZ which operates KFC and Pizza Hut, lost 1.08 percent after announcing its first-quarter sales. equipment retailer Kathmandu KMD.NZ lost 3.2 percent and A2 Milk ATM.NZ fell 2.46 percent.
Accounting software Xero XRO.NZ led gains, rising 3.06 percent, while health software company Orion Health Group OHE.NZ rose 0.97 percent and Sky TV SKT.NZ was up 1.32 percent.